A Post-Election Lovefest, But For How Long?

As Congress returns to work following the election, both Republican and Democratic leaders said Wednesday they it was important to back off hardened positions to reach a quick compromise on tax and budget issues in order to resolve the looming fiscal cliff, saying the U.S. could not afford to postpone resolving the $600 billion in tax hikes and budget reductions set to take effect in January.

It remains to be seen whether they will be able to reach a deal in time, however. The lame-duck Congress returns to Washington D.C. next week and only has a short window of time to address the problem before a winter break. The expiration of the Bush-era tax cuts, combined with mandated spending cuts, are due to kick in Jan. 1.

“The strategy of obstruction, gridlock and delay was soundly rejected by the American people,”said U.S. House of Representatives Minority Whip Harry Reid, D-Nev. “We can achieve big things when we work together. And the middle class is counting on us to achieve big things in the months ahead.”

In the senate, Finance Committee Chairman Max Baucus, D-Mont., also called for the cessation of to “the brawling and brinkmanship,” saying that Congress had to break through the gridlock of the past two years to find a bipartisan agreement on the year-end fiscal issues.

“We need to put progress ahead of politics and work towards a compromise that provides some certainty to American families and businesses,” Baucus said. “We need to craft a proposal that supports jobs, expands opportunity and puts America’s economy back on track.”

On the other side of the aisle, House Speaker John Boehner, R-Ohio, said Wednesday that House Republicans stood ready to work with newly re-elected President Obama to do what's best for the country. He added that if there was a mandate in this week’s election results, it was that Congress needed work together.

“Because the American people expect us to find common ground, we are willing to accept some additional revenues, via tax reform,” Boehner said, but added that willingness to accept new revenue hinged on whether it came from “growth and reform.”

The Speaker was also quick to add, however, that feeding the growth of government through higher tax rates would not help solve the looming spending cuts and tax increases.

"In order to garner Republican support for new revenues, the president must be willing to reduce spending and shore up the entitlement programs that are the primary drivers of our debt,” Boehner said. “We aren’t seeking to impose our will on the president; we’re asking him to make good on his ‘balanced’ approach.”

Ways and Means committee chairman Dave Camp, R-Mich., agreed that there was bipartisan support for tax reform that closes loopholes and lowers rates, but said that like Boehner, he believed that a successful solution must address both the U.S. fiscal crisis, as well as the jobs crisis.

“The problem with the President’s proposed tax hikes is that while it may generate more revenue, it will also mean over 700,000 fewer jobs for American workers – that’s the equivalent of roughly every job created in the United States in the last 5 months,” Camp said.

“There is a better path forward than simply increasing tax rates, and one in which both sides can claim victory,” he added. “We can address both our jobs crisis and our debt crisis by focusing on tax reform that strengthens the economy.”

The Securities Industry and Financial Markets Association CEO Tim Ryan also weighed in on the importance of bipartisan cooperation on Wednesday, saying in a statement that with the election over, it was vital that the country return to the “work at hand.”

"Another important area that is critical to economic growth and our recovery is ensuring that both Democrats and Republicans come together and address the fiscal cliff,” Ryan said. “The potentially negative market consequences of not dealing with this issue are simply too great to ignore."

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